A Green CSR Crystal Ball: Sustainability Trends to Plan for in 2010

This morning, I'd like to welcome a guest post from an industry colleague and friend, Tim Albinson. Tim is President and CEO of Aravo and the author of green and CSR blog, 2Sustain.

Sustainability is no longer considered a passing fad or a nice-to-have extra. Instead, it's now recognized as a key business driver. In fact, a new report from Siemens and McGraw-Hill Construction shows that even during the worst recession in 60 years, corporations across the U.S. continued to accelerate sustainability efforts and increase efficiencies as part of their overall business plans. There's no room left for excuses -- these days, investors, customers, and regulators are expecting to see credible progress on all three fronts: environmental, social, and economic.

But, what lies ahead in the New Year? How will companies move toward what many are calling "Sustainability 2.0?" To help answer those questions, here are my top three emerging sustainability trends for 2010:

It's the supply chain, stupid

Earlier this year, Walmart underscored the vital importance of the sustainable supply chain when it introduced its sweeping, worldwide sustainable product index. Other companies are following suit, and the supply chain is quickly gaining deserved recognition as an essential component of any comprehensive sustainability plan. (A GreenBiz.com survey from last month found that over the past year there was a 63 percent increase in green purchasing among the more than 450 companies polled.)

It's a no-brainer. After all, the vast majority of virtually every company's GHG emissions are embedded in its supply chain. Plus, by focusing on their supplier networks, companies can ensure that their products are being manufactured as responsibly as possible. In short, if you want to reduce your company's environmental footprint, protect its reputation, and help ensure its overall business success, pay attention to the integrity of your supply chain.

The latest research indicates that companies that had a focus on supply chain excellence were best positioned during the recession. Going forward, we're going to see an increased emphasis on measuring and benchmarking supplier sustainability data, and organizations will continue to reap big benefits from supply chain management strategies that integrate both environmental and broader CSR initiatives throughout the supplier network. Also, look for water scarcity and other water-related issues to leapfrog to the top of the sustainability agenda.

Sustainability as part of corporate DNA

While it makes sense to focus initial sustainability efforts on the supply chain, a growing number of leading companies are now transforming their operations -- and, in some cases, their entire business models -- to fully integrate sustainability initiatives across the enterprise. This integration can drive innovation, create competitive advantage, and even unlock other new capabilities. As Adam Werbach sums it up in his book, "Strategy for Sustainability," there are seven fundamental principles at the core of this assimilated, enterprise-wide approach:

Natural resources will become increasingly scarce and expensive.

Massive demographic change is coming.

People are the most important renewable resource.

Cash flow matters more than quarterly earnings.

Every organization's operating environment will change as dramatically in the next three to five years as it has in the past five.

A chaotic external world requires internal cohesion and flexibility.

Only the transparent will survive.

Successful businesses are looking closely at all processes through the lens of tenets like these, and they're aligning operations to meet broad-based sustainability objectives.

These leaders are pushing the envelope and show a willingness to experiment with a wide variety of sustainability initiatives and strategies in the search for those that truly work. Even better, it's becoming increasingly common for them to share information about their successes –and about the challenges that remain. CSR reporting is now the norm among the world’s largest companies, and it's easier than ever before to access data and best practices.

As Jason has pointed out here, companies like P&G have realized that sustainability can easily translate into innovation, competitive advantage, efficiencies, and savings. They have discovered that sustainability is consistent with their profit missions -- and in this economic climate that, more than anything, is driving the sustainability trend.

Spend Matters would like to thank Tim Albinson of Aravo for sharing his thoughts.